06/09/2011 Newsnight


06/09/2011

In-depth investigation and analysis of the stories behind the day's headlines with Jeremy Paxman.


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Transcript


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All those yoghurt weaving hand wringers who thought that the

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summer riots were caused by austerity and social failure were

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wrong were they. The Justice Secretary revealed three quarters

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of the rioters arrested are prior convictions, a feral underclass. If

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he's right most of them are graduates of a criminal justice

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system that has no idea how to rehabilitate their customers. The

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police minister and the former Lord Chancellor are here. James Murdoch

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pleaded ignorance to the House of Commons, that he didn't know about

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the widespread phone hacking going on at the News of the World. Enter

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his company lawyer with this unhelpable intervention. Listen, it

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was the reason - unhelpful intervention. Listen, it was the

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reason we had to settle the case. In order to settle the case we had

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to explain the case to Mr Murdoch and get his authority to settle.

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that game over for James Murdoch's career, or can his media

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organisation shrug off a few poor reviews at Westminster. His

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father's biographer, along with one of his inquisitors and a News Corp

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shareholder. And we name the six towns in Britain with the most

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boarded up shops on the high street. Can they be saved by a TV celebrity,

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heading a Government mission. Shop Tsar Mary Portas has been

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called in as the high street cries out for a sexy new make-over, and

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ministers, as far as they can see, don't have a thing to wear.

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The riots which sent such a shock through Britain last month, were

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largely the work of criminals, the words of the Justice Secretary

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today echoed the Prime Minister, but at another level, his

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disclosure that three out of every four adults charged, already had a

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criminal conviction, raises big questions about what we do with

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people found guilty of crimes. Keneth Clarke describes the record

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of the penal system as "straight forwardly dreadful", and claims to

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be able to fix it. But how? As the CCTV footage is replayed,

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and more suspects identified and arrested, a fuller picture is

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emerging of those responsible for last month's disorder. In London

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there have been more than 2,000 arrests. Three quarters of those

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charged in connection with the riots had criminal convictions. So

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the opportunistic rioting and looting which police admitted today

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they were unprepared for, was largely the doing of what the

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Justice Secretary called "a feral underclass".

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Right after the rioters swept through this street in Hackney, I

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came down here, and remember people's shock at the speed and

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violence of the rampage. Now that we know that most of those

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responsible had previous convictions it raises new questions.

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Not just why did the riots happen, but why is it that people who have

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broken the law and been punished are apparently so willing to

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reoffend. Keneth Clarke, whose breezy

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attempts to cut prison sentence, infuriated many in his party,

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borrowed language they might applaud to condemn the rioters'

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outrageous behaviour. But he used it to argue again that prison isn't

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working. The idea that the length of a sentence is going to solve the

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problem is simplistic nonsense, and good the system worked t does give

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the punishment the public want to see, why doesn't that punishment do

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more good, we don't want them coming back again.

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There were minor disturbances at Westminster today, as London's

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mayor arrived to help MPs unpick what caused the trouble. Boris

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Johnson supported Mr Clarke's call for more adequate punishments that

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help offenders turn their lives around. If you arrest such a huge

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number of people, as we have, and you put them into the criminal

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justice system, you cannot simply abandon them there. The Government

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is holding an official inquiry, but in the meantime, MPs heard from the

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Met's Acting Commissioner, that, in the early phases of the disorder,

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mistakes had been made. Sometimes you suddenly realise how thin the

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blue line is, when you are confronted with such scale of

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disorder over such a large area. But the key for us, in terms of

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stragically getting under control, is crime has to have consequences.

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The arrest of the offenders had to be done swiftly and the courts had

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to respond quickly, that was the key we put into place, that had a

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significant impact in terms of the lack of repeat we then saw. But the

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effectiveness of what happens after arrest and prosecution is under

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scrutiny. While Ministry of Justice figures show the number of crimes

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committed by reoffenders is falling, campaigners say this doesn't tell

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the full story. Reoffending rates are staggeringly high, and have

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been for a very long time. That points us towards the fact that the

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criminal justice system should be doing better at focusing on that

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kind of work with offenders, seeking to reduce reoffending at a

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better rate than it currently does and protecting society from future

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victims being created, we are not doing that at the moment.

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police say the public are helping them to identify more suspected

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rioters. So far 1500 have appeared in court. But the poor outcomes for

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those qual slowed up by the criminal justice system, are -

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swallowed up by the criminal justice are not doing enough to

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stop them getting there in the first place, particularly those

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drawn towards crime. We heard 19% of those charged in London had

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links to gangs, and 21% were aged under 18. At Eastside Academy in

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London's East End, they have a system of mentoring black boys, it

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has led to a drive to recruit black men to help. It was launched at the

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time of the riots, prove detentionly says its founder.

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Something that can be effective for the child at the right time, if you

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take the academy, what we found, in our experience, where you intervene

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early and effectively and decisively, you can make a

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difference. Why? Because the boys are shown an alternative, and they

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are given an opportunity to lift their eyes beyond their current

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circumstances and see a different way.

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The Met have more than 20,000 hours of CCTV film still to wade through.

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More suspects will be marched into court. The fact so many of them

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have a criminal record already means they won't be alone in the

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dock. So will the system that put them

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there. With us now the criminal justice

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minister, Nick Herbert and Lord Fawkes, former Lord Chancellor and

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a Labour Party justice spokesman. Nick Herbert, what do you conclude

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from the fact that three quarters of those charged had a criminal

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record? That the criminal justice system has been failing. That it

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has not delivered the message that offending should have consequence,

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that a system that, sure, should punish people, should incapacitate

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them, actually hasn't done what it also needs to do, which is

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rehabilitate them, and prevent them from reoffending. It should make us

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think very hard about the fact that we are processing tens of thousands

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of offenders every year, but the very large majority of them are

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going on to reoffend in a very short space of time. We have to

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address that. This was a sample of 2,000 people? We know the

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reoffending rates are high any way. But in this particular case, the

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so-called feral, criminal underclass, was a sample of 2,000

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adults, of whom roughly three quarters had criminal records. We

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are talking about a feral criminal underclass of 1500 people? That is

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the plain fact that 75% of them had criminal conviction, and half of

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adult offenders leaving prison reoffend again within a year. We

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know the system is fail to go prevent that reoffending, that is

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why we have to go reform prisons to make them places of work rather

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than idleness. We have to look at the supervision and support we are

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giving offenders after they leave prison. It is why we have to deal

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with drugs in prison, and why we have to have far more effective

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community sentences. I would agree with many of those things, the idea

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it is the failure of the criminal justice system, on the basis of the

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figures produced by the Ministry of Justice today is utter nonsense.

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You have 77% of less than 1600 people described as having previous

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convictions or cautions, did they go to prison, were they fined for

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drunken driving. What on earth are you believing that the criminal

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justice system could do to stop it. What will your Government do, they

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have the highest prison population, and therefore, even less money to

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do anything about it? Well, firstly I think, that we should continue

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with our programme of radical reform of prisons. In particular,

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ideas like paying for effective rehabilitation, which the previous

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Government failed to deliver. reduce the reoffending rates. You

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are talking in fantasy land. need a criminal justice system that

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sends clear signals both in terms of how swift justice is, and how

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effective it is, that offending always has consequences. We have

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failed to do in the past. If you look at the time that is taken

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normally before you put offenders before a Magistrates' Court and

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bring a conclusion, it is 156 days, in this case it was swift and sends

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an important signal to offenders. We think there are very significant

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reforms to drive through, including the use of technology in courts and

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video links. That wouldn't have stopped the riots, would it? That

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will make justice more swift and sure. That is what the public want,

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it sends a clear message to the offenders. We focus on the

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rehabilitation. The vast majority of crime. You know it wouldn't have

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stopped the riots? You are talking nonsense. Half of all crime in this

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country, you know this as previous Lord Chancellor, is commit bid

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people already through the criminal justice system, the system has

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failed to deal with the offenders, we need to deal with that system.

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It hasn't stopped them reoffending? How many of them had cautions where

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nothing happened except a caution, how many did one offence of

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shoplifting. The idea you put on to the criminal justice system the

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whole responsibility for stopping the sorts of crime we saw. What

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your film showed very graphicically and accurately was gang culture is

:11:18.:11:28.
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a very important part of it. What has happened since you came into

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power, and since your mayor is an increase of violence. You are not

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seriously saying it is a consequence of the 2010 election

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are you? No, but it is a much more productive line. This is the

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familiar old Labour line, it is all to do with reducing public spending,

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it is pathetic in terms of dying know six and no excuse - diagnosis,

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and no excuss. You need to have sharp criminal - No excuse?

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need to have sharp criminal justice, and discourage people from joining

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gangs. This idea that there weren't sufficient sentences in the past,

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which Ken's article said and Nick has just said, seems to be nonsense.

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Even if it were right, I'm not clear in my own mind what the

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Government are doing to do about it. For entirely understandable reasons

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the prison population is the highest it has ever been. What are

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you going to do. What are you actually going to do? Firstly, I

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agree with Charley to this extent, we need to look at the issues of

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social exclues, exactly what Iain Duncan Smith has been talking about

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today. We need to look at why it is that young people find themselves

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getting into the criminal justice system in the first place. Does

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that mean dealing with the gang stuff. Dealing with gangs both in

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terms of...Spending Money on that? Also in terms of effective

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intervention and the kind of alternative that is the mayor's

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adviser was talking about. Where will the money come from? With the

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prison population at its highest now. With a robust response. That

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is why the sentencing was absolutely right. It was your

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policy to reduce the prison population? It is the highest it

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has ever been. 8 7,000 or something. August is the lowest month.

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Prime Minister has made it clear sufficient prison sentences will be

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provided. Is it still your policy to reduce the prison population?

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is not. It was? No, the Prime Minister has made clear we will

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provide sufficient places. Your rehabilitation revolution was going

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to be funded out of the reduction in prison places. The right way to

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reduce in the long-term is to reduce reoffending, what we are

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focused on with the radical proposals to get new providers in,

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and interventions and help people get off drugs. The cost of failure

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is huge. You haven't the money to do it. You are spending your money

:14:02.:14:12.
:14:12.:14:13.

on the extra prison places? payments savings are made by the

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radical programme. You should be supporting it. I would support very

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strongly improved measures to reduce reoffending, but I recognise

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for it to be done it involves intensive intervention that is cost

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money. You are not being realistic when you are saying...Your Solution

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as ever is to spend more public money. It may be there isn't the

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money, but you should be straight forward about it. We have the most

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expensive criminal justice system in the world. If spending more

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money we would have effective criminal justice now, we don't, we

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have the highest reoffending rates around. This is how well the money

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is spent, how effective the interventions are, and how well it

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is organised. Tell bus the changes with less money you get better -

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tell us about the changes, with less money you get better results.

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Swifter and insurer justice, and prison sentences, a scheme to pay

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by results to reduce reoffending, capture the savings, there are

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billions of pounds of cost of a failed system, if we can prevent

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that we can save money, reduce reoffending and make a better

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system. That is what we are talking about in social reform and penal

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reform. It is an optimistic message about how to improve the system.

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You have bequeathed a system with prisons full to prison, failing,

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spending more money. You have said it is no longer your policy to

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reduce the prison population, do you mind how big it goes? We have

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said the inexorable growth in the prison population we saw under the

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previous Government, when it is combined with high rates of

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reoffend something a vicious circle, we need to break that. Do you mind

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how high it goes, 8 7,000, where it is now, is that as high as it

:15:52.:15:55.

should go? I want the prison population to fall in the long-term,

:15:55.:16:00.

because it is effective at reducing reoffending. How high should it go?

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We want in the long-term to see a prison population not rising. We

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have not said, the Prime Minister made clear, we will provide

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sufficient prison places for those that the court sentence. That

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happened in the case of the riots and will continue to happen going

:16:15.:16:20.

forward. Your wholly commendable desire to reduce reoffending will

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involve greater expenditure in what goes on in prison, I'm not clear,

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from what you are saying, how you fund more prison places than ever

:16:28.:16:34.

before, and extra work in prison and more extra rehabilitation.

:16:34.:16:37.

have a welfare-to-work programme, you can pay a provider if he gets

:16:37.:16:42.

into work you can pay him for the success. You fund it by the person

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off benefits, you have made a savings and fund the intervention.

:16:44.:16:49.

We can have a payments by results system in the criminal justice

:16:49.:16:55.

system, which says if you can get somebody off reoffending and help

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them go straight with an effective intervention, whatever it is,

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mentoring, you get them to go straight, there is a saving to the

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criminal justice system because they are not incarcerated in future.

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You can capture that saving, and this is why it is an exciting,

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radical scheme to help reduce reoffending in the future. James

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Murdoch, the News International boss who denied knowing how

:17:19.:17:22.

widespread phone hacking was in his company, didn't tell investigating

:17:22.:17:26.

MPs the truth, maybe he did. A former company lawyer said it was

:17:26.:17:30.

inconceivable that Mr Murdoch was unaware how common the practice was.

:17:30.:17:36.

Mr Murd mur responded tonight by saying - Mr Murdoch responded

:17:36.:17:40.

tonight by saying he stood by his remark that he never saw an e-mail

:17:40.:17:44.

relating to staff. The stakes are high, not just for Murdoch himself.

:17:44.:17:48.

MPs have now asked thousands of questions about phone hacking. But

:17:48.:17:53.

through the hours and hours of testimony, and the thousands of

:17:53.:17:58.

hours of broadcasting, the central question hasn't really changed. Up

:17:58.:18:01.

until fairly recently, News International was insisting that

:18:01.:18:05.

phone hacking at the News of the World was confined to one rogue

:18:05.:18:08.

reporter, Clive Goodman, the paper's royal editor, who pleaded

:18:08.:18:16.

guilty and was jailed in 2007. However, that version of events is

:18:16.:18:21.

categorically contradicted by an e- mail, marked "for Neville", it

:18:21.:18:28.

shows transcript of messages left on the phone of Gordon Taylor, of

:18:28.:18:30.

the Professional Footballers Association. Clive Goodman is not

:18:30.:18:33.

called Neville, or as royal editor is he interested in the goings on

:18:33.:18:39.

in the world of football. Anyone who saw the "for Neville" e-mail,

:18:39.:18:43.

or learned of its contents, must have known that phone hacking went

:18:43.:18:47.

far beyond just one single journalist.

:18:47.:18:52.

The paper eventually settled with Gordon Taylor for a whopping

:18:52.:18:57.

�425,000, plus his legal expenses. According to News of the World's

:18:57.:19:02.

external lawyers, that was double the - News International's external

:19:02.:19:04.

lawyers that was double the amount he could have expected if the

:19:04.:19:08.

matter went to court. James Murdoch has signed off on the

:19:08.:19:14.

matter, he said he did not know about the "for Neville" e-mail.

:19:14.:19:20.

you see or were you made aware of the "for Neville" e-mail or message

:19:20.:19:24.

transcript. No, I was not ware of that time. When James Murdoch

:19:24.:19:27.

signed off the Taylor deal and its massive pay-off, there were two

:19:27.:19:31.

other people in the room. Today the select committee heard from both of

:19:31.:19:37.

them. And they both agree that they did tell James Murdoch, not only of

:19:37.:19:41.

the "for Neville" e-mail, but of its huge significance for the

:19:41.:19:49.

company, of which he was supposedly in charge. Tom Crone was legal

:19:50.:19:54.

manager at newsgroup newspapers, and Zdenek Mlynar was there when

:19:54.:20:00.

the settlement was approved. Do you regard the existence of the e-mail

:20:00.:20:06.

as evidence that the phone hacking was k cysting beyond Clive Goodman?

:20:06.:20:10.

That was the first evidence we had seen that it went beyond Clive

:20:10.:20:14.

Goodman. Given it was so significant, clearly it must have

:20:14.:20:17.

featured pretty large in your conversation with James Murdoch?

:20:17.:20:20.

Listen, it was the reason that we had to settle the case, and in

:20:21.:20:24.

order to settle the case, we had to explain the case to Mr Murdoch and

:20:24.:20:30.

get his authority to settle. So, certainly, it would would have been

:20:30.:20:32.

discussed. I cannot remember the detail of the conversation. And

:20:32.:20:38.

there isn't a note of it. The conversation lasts for quite a

:20:38.:20:42.

short period, less than 1547, or about 15 minutes, - 15 minutes, or

:20:42.:20:47.

about 15 minutes, it was discussed. But exactly what was said I can't

:20:47.:20:51.

recall. Inside the committee there was incredulity that at the same

:20:51.:20:55.

time the pair could be so sure in their recollection of their meeting

:20:55.:20:59.

with James Murdoch, but hazy as well. The bit I struggle with, if

:21:00.:21:03.

you are both adamant that James Murdoch knew the full extent of

:21:03.:21:08.

what you were telling him about the "for Neville" e-mail, the bit I

:21:08.:21:12.

struggle with, is this meeting lasted at the absolute maximum, 15

:21:12.:21:16.

minutes. It seems to me if you were telling James Murdoch, actually we

:21:16.:21:20.

have got evidence here that shows that other people at News of the

:21:21.:21:24.

World were involved in phone hacking, that's what we have got in

:21:24.:21:29.

our brief case here. That's why we must settle this case. I can't

:21:29.:21:33.

imagine how you could go through all of that and the implications of

:21:33.:21:37.

that in less than 15 minutes. is my recollection of how long that

:21:37.:21:40.

meeting would have taken. I can't speak for what Mr Murdoch

:21:40.:21:44.

understood at the time or not. I have seen what he has said since,

:21:44.:21:47.

I'm absolutely prepared to accept that he has his recollection wrong.

:21:47.:21:51.

I do, and I am certain, that I explained to him that this document

:21:51.:21:55.

had emerged and I explained what it was and why it meant that the

:21:55.:21:59.

defence that we had lodged in the case couldn't be run any further,

:21:59.:22:04.

we had to get out of it. Again and again, the committee attempted to

:22:04.:22:09.

extract more clarity. Was he clear that this meant there was further

:22:09.:22:12.

wrongdoing within the News of the World, as a result of the existence

:22:12.:22:17.

of that document? It seemed to be clear to other people. I'm not

:22:17.:22:22.

asking about other people, I'm asking about him. I can't speak for

:22:22.:22:25.

Mr Murdoch's recollection of this, and I can't speak for Mr Murdoch's

:22:25.:22:31.

view that he took away from that meeting. What I took away from that

:22:31.:22:35.

meeting was that there was an agreement to settle, and that is

:22:35.:22:41.

what happened. The significance is very clear, from Mr Murdoch's

:22:41.:22:45.

testimony, he said neither Mr Crone or Mr Mlynar said there was any

:22:45.:22:48.

wrongdoing by Mr Mulcaire, there was nothing from the meeting that

:22:48.:22:51.

led me to believe that further investigation is necessary. He's

:22:51.:22:54.

very clear on his recollection of the meeting and you are not.

:22:54.:22:58.

sorry, I am clear, there was no ambiguity of the significance of

:22:58.:23:03.

that document and what options were there for the company to take.

:23:03.:23:13.
:23:13.:23:26.

statement tonight, James Murdoch It seems certain now that the

:23:26.:23:29.

committee will be recalling James Murdoch, the decision won't be

:23:29.:23:33.

taken until next week. With us now in the studio is

:23:33.:23:38.

Michael Wolff a contributing editor to Vanity Fair, and the biographer

:23:38.:23:44.

of Rupert Murdoch. Also here is Louise Mensch, the MP who sits on

:23:44.:23:48.

the Culture Select Committee, and we are joined by Donald Yacktman,

:23:48.:23:50.

President of Yacktman Asset Management Company, one of the

:23:50.:23:55.

biggest investors in News Corp. How much trouble is James Murdoch in do

:23:55.:23:59.

you think? Career-ending trouble. The trouble of his lifetime. I

:23:59.:24:04.

don't think you can exaggerate how much trouble he's in. His

:24:04.:24:08.

credibility has been virtually destroyed, and credibility is the

:24:08.:24:14.

coin of the realm when you're running a major coopgs. So it is

:24:14.:24:19.

over for him - Corporation. So it is over for him? It is over, but

:24:19.:24:23.

the over may take several months. On this particular issue, he has

:24:23.:24:28.

wriggle room, doesn't he? I think he has plenty. I think your report

:24:28.:24:33.

there was extremely fair. We saw testimony today, as your report

:24:33.:24:36.

said, members of the committee attempted to extract clarity, I

:24:36.:24:39.

attempted to extract some clarity, it was made clear n my own view,

:24:39.:24:43.

and I can't speak for the rest of the committee, that he had had

:24:43.:24:48.

agreed to settle the case. To my mind it was not at all made clear

:24:49.:24:52.

that he had been told definitively that wrongdoing extended beyond

:24:52.:24:56.

Goodman and Mulcaire. All you are establishing there is the

:24:56.:25:02.

possibility that he may stay out of jail. Anyone else looking at this

:25:02.:25:12.
:25:12.:25:14.

says he's a dissemabler, he's a misrepresenter, he's someone, in an

:25:14.:25:17.

overarching way, is not fundamentally being straight, or

:25:17.:25:21.

doesn't know what was going on. will deny several of your

:25:21.:25:24.

accusations straight off, and they are not provable at this point?

:25:24.:25:27.

This is matter of perception, and a matter of people who have seen this

:25:27.:25:33.

week after week, month after month now, and you see a person who has

:25:34.:25:39.

paid an enormous amount of money for what possible reason? This is a

:25:39.:25:49.
:25:49.:25:53.

matter of both perception and beyond that pure logic. As a major

:25:53.:25:56.

investor at News Corp, what do you make of what is happening here?

:25:57.:26:04.

makes for titilating press. But it doesn't effect...? As an investor

:26:04.:26:09.

our thesis, it doesn't effect our thesis of investment in this

:26:09.:26:15.

company. The basic thing we look for is a forward rate of return. If

:26:15.:26:18.

we were to buy a company and hold it for a long period of time, what

:26:18.:26:23.

kind of rate of return would we get. In fact, this might sound counter

:26:23.:26:28.

intuitive, that things that come out that knock the stock price down,

:26:28.:26:34.

we like because that means that we can buy more of it at good value

:26:34.:26:37.

and the company is in there buying their stock back. What have you

:26:37.:26:41.

been doing buying the stock for. You haven't kept pace even with the

:26:41.:26:45.

SNP, this is a money-losing investment you are looking at.

:26:45.:26:49.

Depends on what time frame you are looking at. We are very long-term

:26:50.:26:54.

investors. You have said you're a long-term investor, if you are a

:26:54.:26:56.

long-term investor in News Corporation, you have lost money?

:26:56.:27:01.

No, we haven't. We have made a ton of money. We bought it two years

:27:01.:27:08.

ago. If you had bet on the SNP, you're underwater, so on the most

:27:08.:27:12.

basic...Not At all. Absolutely wrong, you're absolutely wrong.

:27:12.:27:17.

Trust me, I could take over your business, because you

:27:17.:27:20.

absolutely...He Has half a billion dollars invested in this company,

:27:20.:27:28.

how much have you got invested in it? A lifetime of work. You are

:27:28.:27:31.

under water, you are absolutely under water on this company if you

:27:31.:27:37.

have held this over a long period of time. Let's broaden this out.

:27:37.:27:40.

ought this two years ago. You have invested in a company in which you

:27:40.:27:44.

don't have a vote. Can I finish. Hang on a second, in your judgment

:27:44.:27:50.

is there any possibility now of James Murdoch ever taking over News

:27:50.:27:53.

Corporation? There is no possibility of him taking this

:27:53.:27:56.

company over. And the company itself has basically now set this

:27:56.:28:04.

up. They don't refer to James as the heir any more. It is now Chase

:28:04.:28:09.

Carey is the person who will have the power passed to if Washington

:28:09.:28:14.

Post comes to worst. I think that the internal workings of News

:28:14.:28:17.

Corporation are a matter for them. What the committee is trying to do

:28:17.:28:23.

is establish the truth. I can speak purely only for myself, we heard an

:28:23.:28:27.

awful lot of muddied evidence today I thought and not a lot of clarity

:28:27.:28:33.

was brought to the table. Mr Wolff passion shows many people come to

:28:33.:28:37.

the Murdochs with a certain agenda, my job and the committee is to see

:28:37.:28:41.

if the previous committee was misled. You have done a fairly

:28:41.:28:46.

terrible job on. That I would suggest that all of you people

:28:46.:28:54.

should spend a smes ter at an American - sem mess ter at an

:28:54.:28:58.

American legal college. That is because you see hooves coming out

:28:58.:29:08.
:29:08.:29:11.

of their head. I am not in any way a Murdoch antagonist. Are the

:29:11.:29:15.

Murdochs a fit and proper people to be running a company? I want to go

:29:15.:29:19.

back and address this other thing. If their credibility is a problem,

:29:19.:29:23.

the person that just spoke about righting a novel, or whatever it

:29:23.:29:28.

was. It is called a biography. Maybe it was a novel. A biography,

:29:28.:29:31.

your credibility has just been destroyed, because if you looked at

:29:31.:29:35.

where we bought News Corporation, and what's happened to the SNP in

:29:36.:29:41.

the interim, you have found out we have done well above the SNP in

:29:41.:29:46.

News Corp. You seem to have these very strong opinions and you don't

:29:46.:29:51.

know where you are coming from. have asserted the worthwhileness of

:29:51.:29:58.

holding shares in News Corp, what I'm wondering is how much your

:29:58.:30:01.

commercial judgment is affected by all these things that seem to be

:30:01.:30:07.

coming out about the way some elements of the Murdoch empire

:30:07.:30:16.

operate? Well, again, to us this is more politics and this is a deep

:30:16.:30:21.

bench. Mr Rupert Murdoch is the one who founded this company, and is,

:30:21.:30:29.

if you will, the brainchild behind is. And I think Chasecarey is an

:30:29.:30:37.

excellent - Chase Carey is an excellent executive and heir to

:30:37.:30:41.

this. I have empathy and I'm concerned about the company, but as

:30:41.:30:43.

far as whether James Murdoch runs it or not, I think this investment

:30:44.:30:47.

is still going to be a very good investment.

:30:47.:30:50.

You would be perfectly happy. have just heard a difference in the

:30:50.:30:54.

company line, they would never have said that two months ago. Sure. Let

:30:54.:30:59.

me clarify one thing, you would be perfectly happy as a major investor

:30:59.:31:03.

in this company to have James Murdoch take it over, would you?

:31:03.:31:11.

think it depends on the time frame. The overall circumstances as well.

:31:11.:31:16.

I think that is premature, that is the board of directors' decision,

:31:16.:31:19.

they are in a much better position to make that kind of decision. They

:31:19.:31:23.

should exercise it. Mensch, the other contribution on the question

:31:23.:31:26.

of the Murdoch empire today, came from the Prime Minister, your

:31:26.:31:30.

leader, who said perhaps, he had been too close and he should

:31:30.:31:34.

maintain distance in future. Can he realistically do that? I think he

:31:34.:31:39.

can certainly try, and one thing that will come out of the press

:31:39.:31:43.

inquiry in general is the closeness of politicians to the press. In our

:31:43.:31:46.

previous committee we heard testimony from Mr Rupert Murdoch b

:31:46.:31:52.

how close he had been to successive primes of all parties, how many

:31:52.:31:57.

times under - prime ministers, of all parties. And how he had gone in

:31:57.:32:00.

and out of the back door. The fact of the matter, contact between the

:32:00.:32:05.

press, the lobby and politicians had to be maintained, but from now

:32:05.:32:09.

on they would be logged and open. The fact there will be no more cosy

:32:09.:32:13.

fire side chats is perhaps a good thing. The people have a right to

:32:13.:32:20.

snow when the lead - know when the leaders are meeting press Barons,

:32:20.:32:25.

that won't stop but it needs to be transparent. If you look at the

:32:25.:32:31.

high street and see boarded up shops and the same dreary brands

:32:31.:32:39.

everywhere, don't despair. You could be in Hartlepool, west port,

:32:39.:32:45.

and west prom witch. They have the highest proportion of boarded up

:32:45.:32:49.

shops. The Government is concerned, and has asked Mary Portas, the so-

:32:49.:32:53.

called Queen of Shops, to investigate and come up with ideas

:32:53.:33:03.
:33:03.:33:04.

of bringing back life to the high street. We have been out with them.

:33:05.:33:10.

Whoever said it is grim up north, never saw a walk about in Rotherham

:33:10.:33:16.

by television fashionista, Mary Portas. It is brilliant, something

:33:16.:33:20.

different. David Cameron's shops' Tsar. That said, not even her

:33:20.:33:25.

copper bob and towering heels, could entirely distract the eye

:33:25.:33:29.

from vacant premises and cut-price discount chains.

:33:29.:33:33.

Pound shops are catching on here, probably not for you. Probably not

:33:33.:33:43.

for you, either. Is that a pound jacket. What do you think of the

:33:43.:33:47.

schmutter? Lovely. This is what I believe in, I would be doing this

:33:47.:33:50.

despite Government. If Government support it, which I'm hoping they

:33:50.:33:56.

will, we will be able to, hopefully, leverage this a lot quicker than if

:33:57.:34:03.

working on your own or with councils. At this bakers in

:34:03.:34:08.

Rotherham Town centre, they warm up snacks for office workers, they say

:34:08.:34:12.

people prefer to go to supermarkets for the family loaf or the big shop,

:34:12.:34:17.

other outlets have simply disappeared. There is no gents'

:34:17.:34:21.

outlet, no toy shops, you can't entertain the kiddies for half an

:34:21.:34:25.

hour in the toy shop. There is nothing like, that you send them

:34:25.:34:28.

into Argos and look through a catalogue. That is not the same for

:34:28.:34:37.

kids, they like to touch. In the shopping jargon, the foot

:34:37.:34:43.

fall has all been going away from the high street in many farts of

:34:43.:34:47.

the country. But analyst - parts of the country, but this analyst has

:34:47.:34:51.

been heading in the other direction, crunching the number of shops as

:34:51.:34:55.

they shut. As recently as two years ago, only 6% of shops on Britain's

:34:55.:35:01.

high streets were disuse the. Now more than 14% - disused, now more

:35:01.:35:06.

than 14% of them are. That is 39,000. The reality that comes out

:35:06.:35:10.

of this, is we have permanent change here, and some of the

:35:10.:35:13.

centres that are right up in the high, one in three shops being

:35:13.:35:16.

vacant, will never go back to what they used to be. Therefore, there

:35:16.:35:21.

has to be some kind of change of use, or purpose for that centre.

:35:21.:35:28.

some towns, well over a quarter of shops are idle and shut up.

:35:28.:35:34.

Newsnight has discovered that the six places with the biggest

:35:34.:35:41.

Even very respected people are saying get rid of the high street,

:35:41.:35:45.

it is finished, it is out of town? I think there are some towns, I

:35:45.:35:48.

don't think it is finished, that is ridiculous, we have towns where it

:35:48.:35:52.

is working. There are towns where it is dead, the horse has bolted.

:35:52.:35:59.

Just give up on those? Give up. There are some towns we can look at

:35:59.:36:02.

a rejuvenation, whether that is housing or looking how to change

:36:02.:36:05.

some of the towns. That has to be done, it is bonkers to say we can

:36:05.:36:09.

do them all, we won't be able to. There are many towns that have

:36:09.:36:13.

great potential to do that. It is looking at what that new business

:36:13.:36:19.

model will be, and looking at how consumers have changed. This is the

:36:19.:36:26.

severed foot there. �2.99, fantastic for the kids. What

:36:26.:36:36.
:36:36.:36:37.

whether they go for? An arm and a leg! Yes, more delicate retailers

:36:37.:36:42.

may recoil in terror. But pile them high and sell them cheap are rising

:36:42.:36:46.

from the tomb of the high street as we knew and loved it. The low-

:36:46.:36:49.

budget shops, which are opening as others go dark, course well on

:36:49.:36:55.

price and convenience. But they claim they can only operate at

:36:55.:37:01.

bargain basement wage levels. pay the minimum wage, and then

:37:01.:37:05.

obviously the staff, the supervisors and the managers are

:37:05.:37:08.

obviously on more money, yeah. that fair and ethical, are you

:37:09.:37:15.

making profits on the back of your workers? Absolutely not, we are

:37:15.:37:19.

here and trading at the absolute minimum on the profit margins. The

:37:19.:37:23.

profit margins are very inthis. You are right in what you said earlier,

:37:23.:37:27.

it is stack it high and sell it cheap, that is the only way we

:37:27.:37:31.

could do it. You couldn't afford to pay them more? The model wouldn't

:37:31.:37:38.

work. But on the stay the Shops' Tsar

:37:38.:37:42.

came to town, we found innovative thinking in Rotherham. Council

:37:42.:37:48.

workers tried to brighten the centre by getting rid of chewing

:37:48.:37:54.

gum. It changed the it into a crime scene out of an old detective

:37:54.:37:58.

movie! Remember the numbers that come back. After this shoe

:37:58.:38:02.

shopowner was refused a loan by the banks to expand his business, the

:38:02.:38:05.

borough council are thinking of stepping in to act as guarantor.

:38:05.:38:09.

They wanted to buy the buildings themself, when the new Government

:38:09.:38:14.

came in, they said draw a line under that, we stepped in to try it,

:38:14.:38:16.

they have been very supportive, they will be guarantors against a

:38:16.:38:21.

mortgage for us. We won't get the money, we have to pay every penny

:38:21.:38:27.

back, they will be behind us assuring the lender we will repay.

:38:27.:38:31.

Do you want Mary to buy a pair of boots while she's here? She can

:38:31.:38:37.

have a pair if she likes. Is that Newsnight, ever sophisticated. What

:38:37.:38:42.

is curious about the Shops' Tsar, including the ministers who

:38:42.:38:47.

recruited her, is she believes shops aren't necessarily the answer.

:38:47.:38:52.

I don't know if I'm optimistic, I'm realistic, I will give it my best

:38:52.:38:56.

shot in thinking what the future might be for retail in the town

:38:56.:39:00.

centre, it might not be the mix we have seen over the last 20 years,

:39:00.:39:07.

and we will be looking at a very different mix t might not be retail,

:39:07.:39:11.

but social meeting places and any reason to get people back in, if we

:39:11.:39:15.

won't we will have social problems back on our hands. We have seen

:39:15.:39:19.

that, even with the riots, if there isn't a sense of belonging. Mary

:39:19.:39:23.

Portas says she has had no guarantees from Government that

:39:23.:39:27.

they will implement her advice in the autumn, when she offers the

:39:27.:39:34.

high street her brand of retail therapy.

:39:34.:39:40.

Rodney Fitch has styled many of Britain's most famous shop fronts,

:39:40.:39:44.

including Top Shop, and Phillip Blond, a self-styled red story is

:39:44.:39:48.

the founder and director of the - red story is the founder and

:39:48.:39:51.

director of the think-tank, ResPublica. What preserve of the

:39:51.:39:55.

Government is it to try to preserve the high street? It is up to the

:39:55.:39:58.

Government to represent the interests of the people. Very

:39:58.:40:01.

clearly an overwhelming majority of people in this country care very

:40:01.:40:04.

deeply about their high street, the mix of t and what's happening to it.

:40:04.:40:09.

In that case, why don't they shop there? You have hit on one of the

:40:09.:40:14.

issues. What I think is interesting is people can want one thing and do

:40:14.:40:18.

another. What is really interesting is if we look at what is happening

:40:18.:40:24.

to the town centres, there is three factors, there are, genuinely,

:40:24.:40:27.

uncompetitive practices going on, by for instance, supermarkets and

:40:27.:40:33.

out of town developments. There are supsidies to that business model,

:40:33.:40:36.

and small shops and local shops have to get their act together a

:40:36.:40:40.

lot are awful. We need a new way of delivering local retail. You would

:40:40.:40:44.

agree, as a member of this society, that it is better that we have

:40:44.:40:49.

healthy high streets than unhealthy high streets, presumably? I would

:40:49.:40:55.

agree we have, it is better we have healthy shopping, rather than

:40:55.:41:00.

necessarily healthy high streets. I think I agri with Mary, and that

:41:00.:41:03.

little film - agree with Mary and the film, there are some high

:41:03.:41:06.

street that is are very good, other high streets are very poor. The

:41:06.:41:14.

people deserve better. It is already talking about Government

:41:15.:41:17.

intervention and they should do this and that. But the people

:41:17.:41:21.

choose. You don't live by shopping alone? More or less it is the

:41:21.:41:28.

purpose of life, more or less. It is a huge economic driver, it is

:41:28.:41:33.

what people like to do. I know of a study going on for 15 years, across

:41:33.:41:39.

19 countries, and at no time in any year has shopping been out of the

:41:39.:41:45.

top four things that people want to do. And you don't give a monkeys if

:41:45.:41:50.

people are going off to out-of-town shopping centres, where they see

:41:50.:41:53.

all the same sorts of shops as they would see anywhere else and the

:41:53.:41:59.

heart of their town dies? That isn't true. They go to these

:41:59.:42:02.

places...I'm Asking if you care or not? I care about people shopping

:42:02.:42:08.

well, I care about that very much. They will find, people find better

:42:08.:42:14.

shopping in places other than traditional high streets. I think

:42:14.:42:18.

it is not the people needing to stop shopping, they can shop

:42:18.:42:21.

differently. The ways of shopping differently is changing the way in

:42:21.:42:25.

which we sell goods and the way in which we buy goods. But if we stay

:42:25.:42:30.

as we are, let's be clear, we will have a shopping centre just full of

:42:30.:42:33.

cloned stores, charity shops and pound shops, and nobody, in my view,

:42:33.:42:37.

in this country, wants that. So we need to do something to change the

:42:37.:42:41.

game. He does? He has a vested interest in that, also it is an

:42:41.:42:45.

interesting comment to make. But I think in his hearts of hearts he

:42:45.:42:49.

doesn't believe that. I bet where he chooses to live he won't select

:42:49.:42:54.

to live near a town which has that dead centre. Apart from hoping

:42:54.:43:00.

people will have some conversion to shopping on the high street, and

:43:00.:43:03.

high street retailers sharpen their act up. Have you other ideas what

:43:03.:43:09.

to do with high streets? You can remove the subsidies that the

:43:09.:43:13.

present model, one of those supsidies is rate relief on car

:43:13.:43:21.

parking. That see sengsly in town retailing - that is paying rates on

:43:21.:43:27.

parking spaces in the town and the out of town doesn't. The Localism

:43:27.:43:31.

Bill Hasselhoff moved to allow town centres to be free not to charge

:43:31.:43:41.
:43:41.:43:43.

and open up car - the loyalism bill has moved to allow town centres to

:43:43.:43:48.

be free from rates for packing. local authorities make it difficult

:43:48.:43:52.

for them to use the high street, and if the Government is to be an

:43:52.:43:55.

interventionist Government, which I personally worry about, they should

:43:55.:44:01.

be trying to join up the dots, rather than just...They Already

:44:01.:44:04.

have, in the last few days the Government has shown very clearly

:44:04.:44:09.

it has removed the restrictions on car parking, so from now on, town

:44:09.:44:13.

centres will be free to do whatever they want in respect of car parks.

:44:13.:44:17.

Also, what is interesting, is the Government has, once again,

:44:17.:44:22.

reasserted the priority of in-town development. For new development it

:44:22.:44:25.

has doubled the period of time in which the assessment for

:44:25.:44:29.

sustainability takes place. So I think there are things we can do.

:44:29.:44:35.

It is not inevitable. It sound like King Kantue? It is not, already we

:44:35.:44:44.

have very successful town centres, Mary has spoken about things do -

:44:44.:44:49.

doing well. She has also conceded some will go under? Town centres

:44:49.:44:52.

can be different, they can be a way to bring theatre and leisure to

:44:52.:44:57.

people. New ways to make town centres exciting places. Unless

:44:57.:45:01.

local retail gets its act together. We have small shopkeepers operating

:45:01.:45:05.

in ways that don't help the whole area, we need to get them to

:45:05.:45:10.

operate as an area to change the mix of their area and open it up to

:45:10.:45:15.

new entrants. We really shouldn't think about some kind of romantic

:45:15.:45:20.

high street of the past with the local butcher and the local baker,

:45:20.:45:26.

et cetera. What would you use it for? What would you use the high

:45:26.:45:30.

street for. Mary gave something of an indication. There is so much

:45:30.:45:34.

innovation in the retail business and technology, it is the most

:45:34.:45:38.

dynamic of industries, retail will find its own level. What to do with

:45:38.:45:46.

the high street. What it won't do is put back poor quality bakers,

:45:46.:45:50.

poor quality butchers because the people won't go there. They won't

:45:50.:45:53.

use it. But it is false choice, nobody is arguing for that.

:45:53.:45:59.

Everybody wants to have high- quality, local retail there is lots

:45:59.:46:03.

of measures you can do to generate. That you can remove the supsidies

:46:03.:46:07.

of a model that destroys town centres and put in innovative new

:46:07.:46:12.

practices to change the mix but renew our cities and towns.

:46:12.:46:15.

Tomorrow morning's front pages now. The Guardian says James Murdoch

:46:15.:46:19.

will be recalled, although the decision has not yet been taken by

:46:19.:46:29.
:46:29.:46:44.

the media select committee, it That's it for tonight. The Rugby

:46:44.:46:49.

World Cup begins on Friday, in New Zealand on every corner of every

:46:49.:46:55.

street and shopping mall, flash mobs of Kiwi youth are gathering to

:46:55.:47:05.
:47:05.:47:34.

Hello there, pretty windy outside. The winds dropping further through

:47:34.:47:37.

the early hours. Tomorrow will be breezy but not as strong, the wind,

:47:37.:47:41.

not as gusty as it was during Tuesday. There will be a lot of

:47:41.:47:44.

showers, mostly focused across western Scotland and North West

:47:44.:47:47.

England. To the east of the Pennine, one or two getting through, a good

:47:47.:47:52.

chance of staying dry. A dryer day across East Anglia, not many

:47:52.:47:56.

showers here, and there should, at times, be sunshine coming through.

:47:56.:47:59.

After a bright start it will cloud over in the south west. A few

:47:59.:48:03.

showers could drift by on the breeze, overall a dryer day on

:48:03.:48:07.

Tuesday, as it will be in South Wales. Northern parts of Wales will

:48:07.:48:11.

see fairly frequent showers blown in on a strong wind t will be a

:48:11.:48:15.

windy day across Northern Ireland. Not much sunshine here, cloudy with

:48:15.:48:18.

frequent showers. The showers will pepper western Scotland as well.

:48:18.:48:22.

Not too many getting to the north- east a good chance of sunshine for

:48:22.:48:26.

the likes of Aberdeenshire. It will feel cool wherever you are because

:48:26.:48:29.

of the strength of the wind. By Thursday the winds are easing,

:48:29.:48:33.

across Scotland it is looking like a dryer day with a better chance of

:48:33.:48:43.
:48:43.:48:48.

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